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FOREX: AUDUSD Extends Recovery, Rises Above 20-day EMA

FOREX
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  • The strong performance for equities in the aftermath of the data has helped AUDUSD extend its recovery to 1.82% from cycle lows printed earlier in the week. The latest 45 pip bounce sees the pair pierce above initial 20-day EMA resistance, which intersects today at 0.6236.
  • While a bearish trend remains intact overall, these favourable dynamics could prompt a stronger correction, targeting the 50-day average is at 0.6351.
  • Rabobank have said that on the approach of Trump’s inauguration next week, the market has started to question if it has priced-in too much inflation risk into US assets. This suggests scope for profit-taking in USD long positions which could limit downside potential in AUD/USD near-term.
  • Despite this, on anticipation that USD strength will be a theme of the year ahead and with Chinese economic headwinds still in focus, Rabo see risks of a move to 0.6000 in AUD/USD around the middle of 2025. 
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  • The strong performance for equities in the aftermath of the data has helped AUDUSD extend its recovery to 1.82% from cycle lows printed earlier in the week. The latest 45 pip bounce sees the pair pierce above initial 20-day EMA resistance, which intersects today at 0.6236.
  • While a bearish trend remains intact overall, these favourable dynamics could prompt a stronger correction, targeting the 50-day average is at 0.6351.
  • Rabobank have said that on the approach of Trump’s inauguration next week, the market has started to question if it has priced-in too much inflation risk into US assets. This suggests scope for profit-taking in USD long positions which could limit downside potential in AUD/USD near-term.
  • Despite this, on anticipation that USD strength will be a theme of the year ahead and with Chinese economic headwinds still in focus, Rabo see risks of a move to 0.6000 in AUD/USD around the middle of 2025.